The large trade deficit in the United States in the 1990s is primarily associated with a rise in domestic investment rather than a rise in the budget deficit.

Question

Quizplus · Accepted Answer

The large trade deficit in the United States during the 1990s was primarily a result of a rise in domestic investment, which led to increased imports of capital goods and higher demand for foreign investment. While the budget deficit may have contributed to the trade deficit to some extent, it was not the primary driver.

The Large Trade Deficit in the United States in the 1990s